Catering Pricing Is Not Rocket Science

It’s hard to imagine that we need to be thinking about the Holidays already. It’s rather unsettling when you walk into Macy’s in the middle of September and the display team is staging their Christmas trees.

So I wasn’t that surprised when I received an email from a catering manager in Chicago who wanted to know how to price out a holiday catering menu now since she didn’t know the prices two months later when the menu becomes the backbone of the catering season.

This is the same dilemma that every chef, owner and kitchen manager faces daily. The restaurant business is merely made up of mini commodity brokers. The difference, of course, is that the pig bellies get delivered to your back door and we have to find an interesting, flavorful and enticing way of selling them.

In order to price something currently with the expectation of selling it in two months is a very risky proposition unless you have the back up data to justify the numbers. You have to address the point of whether or not your market will support the prices you want to introduce for the product you want to offer. Seeing as it is the holiday season and the economy is good – for the most part – businesses will tend to have impressive holiday parties this year. Now that doesn’t mean that they will spend with a blinded eye, yet they will, as they have in the past years, have gatherings that will include corporate heads, neighbors and friends. And depending on the size of your operation, the holiday catering season should be a major profit center. For many restaurants struggling to achieve a profit position before the year’s end catering both on premise and off premise is the difference between profit and loss.

That gets us back to the menu. The mark up on catering is more substantial than it is on a regular menu. And, Christmas catering is especially customized. I have always added theme parties to the holiday menu which tend to attract a very special client but also sell for a higher price.

There is almost no way to assure that the prices you create today will be profitable in December unless you leave enough room for profitability. Also, having strong vendor relationships will help with price fluctuation. Many vendors will offer contract pricing that will guarantee pricing throughout the year.

Another way to increase income is to offer off premise catering. Parties varying in size from 30 to 200 people often become huge profit centers and also allow restaurant owners with smaller dining rooms to expand their volume for a few months.

Also, when planning off premise catering consider the Christmas buffet: It is easier to prepare, easier to keep hot, and easier to serve. It’s a great way to increase your customer count without increasing your rent or overhead.

Expert Profile

John Foley joined AllBusiness.com in 2005, bringing with him an extensive body of communication, culinary, and business expertise. He is a successful entrepreneur whose interests focus on food, publishing, and communications. He has published weekly and daily newspapers and magazines, has owned and operated eight restaurants, and has begun two Internet companies. He honed his Internet development, sales, and marketing skills as Publisher of IzmoMedia, a Bangalore, India-based content provider. He is a noted culinary and business columnist whose work appears in the San Francisco Chronicle, Examiner.com, and a variety of other Internet sites. He has consulted on numerous restaurant, newspaper, and Internet startups. Foley recently joined crowdfunding company Foodie Tout to develop, launch, and publish FoodieDaily.com, a new Internet food site covering the who, what, where, and how in the world of food.

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